The Golden State’s new $330 million incentive program has helped renew confidence that California policymakers won’t give up on staying competitive. But Hollywood owed its regained stature to the apparent exhaustion of its far-flung rivals. “California’s gains appear to be a direct result of a wave of disenchantment with tax incentives that has bubbled over in Maryland, North Carolina, Massachusetts and Michigan, where credits are being rolled back or eliminated,” The Wrap reported.

“Four states offered tax credits in 2002, but by 2012 that number was over 40 as legislators anxious to point to job creation and tourism opportunities opened up their wallets. The exodus rocked California’s status as the nation’s production capital, costing thousands of jobs and as much as $9 billion from its economy. Today, roughly 30 states offer incentives, with Arizona, Idaho, Indiana, Iowa, Kansas, Missouri and Wisconsin all ending their programs and others planning to do the same.”

An ebbing trend

The swing in fortunes has been dramatic and largely unexpected. A few states have dangled larger lures, boosting or expanding programs inaugurated earlier. Kentucky Gov. Steve Beshear signed a suite of incentives into law after losing out in recent years to states with more lucrative offerings. And though Massachusetts, Mississippi, New Mexico, Pennsylvania and other states scattered across the country have maintained various incentives, the shift away from the highly-competitive scene in recent years has been marked.

A stampede in the opposite direction could be in the offing. Amid stalled budget negotiations, Illinois Gov. Bruce Rauner put a freeze on applications for his state’s film tax credit. As Jason Lynch reported at Quartz, Florida’s nearly $300 million allocation in 2010 has petered out years ahead of schedule, touching off a westward production migration:

“Florida’s tax incentives had been expected to last through 2016, but funding has already run dry, and the state once known as “Hollywood East”—in the ’70s and ’80s, it often had the second busiest shooting schedule outside of California—is rapidly losing productions and crew members to other states with more generous subsidies like Louisiana and Georgia, and, ironically, California.”

Recalcitrant Republicans

State Republicans have played a particularly notable role in rolling back incentive programs. In Louisiana, presidential contender Gov. Bobby Jindal divided opinions in his home state by putting an end to its role in the incentives race. New legislation he signed “caps the amount of credits the state will redeem at $180 million each year,” Variety reported. “Industry groups fought the legislation, with some arguing that the restrictions will cause studios to look elsewhere. In fact, Louisiana’s lieutenant governor, Jay Dardenne, who is running for governor, issued a statement saying that the legislation ‘creates unnecessary instability and uncertainty in the industry.'”

Louisiana had become a regional magnet for production, Variety added, with recent successes including Fantastic Four, The Magnificent Seven and global blockbuster Jurassic World. 

Sentiments like Jindal’s have been even more pronounced among Republicans where states have simply run out of money for the relative luxury of a local entertainment industry. In Alaska, a dip in oil revenues prompted state Republicans to shut down their nascent pipeline for film and television production.

“With the state’s budget deficits growing, support for the subsidies waned in the Legislature, and Sen. Bill Stoltze, R-Chugiak, who had opposed creation of the program in the first place, sought its repeal. His legislation passed 14-6 in the Senate and 23-17 in the House of Representatives, largely along party lines with Republicans joining Stoltze in opposition,” according to Alaska Dispatch News.

Despite the program’s evident popularity, Alaska Gov. Bill Walker said he couldn’t justify the expenditure while shutting down Alaska State Trooper stations, the Dispatch News noted.

March 16, 2013

By Josephine Djuhana

NATIONAL HARBOR, Md. — Former Speaker Newt Gingrich lit up CPAC on its third and final day of convention, opening with bold criticisms against the Republican establishment and its consultant culture.

“The Republican establishment is just plain wrong about how it approaches politics,” he said, adding that the RNC’s effort to produce a report on initial changes was a good first step in the right direction. It was essential, he said, that conservatives “disenthrall” themselves from the establishment’s “anti-idea approach” and its “consultant culture”, which only perpetuated the process of raising money to run attack ads.

Gingrich also emphasized the importance of new ideas, not new principles. “We need lots of new ideas on how to implement those principles in the twenty-first century,” he said. Additionally, he highlighted the need of finding ways to empower people to leave poverty, empower small businesses to create jobs and get government out of the way.

Calling the establishment “prisoners of the past” and “trapped in the age of candles,” Gingrich quoted President Ronald Reagan and stated there was “no such thing as left or right” but only an “up or down.”

“We stand today on the edge of a great future, but Washington is blind to it in both parties,” he said, underlining the necessity to push past partisanship.

Gingrich also produced a stark contrast between conservatives that believe they have a “capacity for self-government” or a people that “abandon the American revolution.” Citizens, he said, must be empowered to solve things for themselves by getting rid of government and replacing the institutions with citizen activism. He then praised ‘Citizenville,’ a book by California’s very own Lieutenant Governor Gavin Newsom.

“It is sobering to me, to be standing here as a senior member of this party telling you that from 1976 to 2013, we have the dominant wing of this party which has learned nothing,” said Gingrich. Republicans, he said, should be in the business of “reshaping the budget” to liberate the American people and create a better future with a smaller government and balanced budget. “It is much more than a fight over numbers,” he added. “It’s a fight over values.”

The former speaker also quoted Louisiana Governor Bobby Jindal, asking Republicans to stop “dumbing down” conservative ideas and reducing their ideals to “campaign slogans and taglines.”

“We are not the anti-Obama movement,” said Gingrich. “We are for a better American future.”

He pointed to both parties in Washington, D.C., saying they were “blind to the potential in this country.” But there was hope, he said, if the conservative message focused on “the right to rise,” as well as its predicate, “the right to life.”

CalWatchdog.com Editors

NATIONAL HARBOR, Md. — It’s no secret that Republicans in the Golden State have been dispirited by the last two election cycles where the GOP has been relegated to virtually no power in statewide politics.  Nationally 2012 was also a lackluster election year for Republicans, yet many in the party are beginning to bounce back showing signs of optimism. The source of this energy is not due necessarily to the ongoing Conservative Political Action Conference but instead due in part to Senator Rand Paul’s recent filibuster in the United State Senate.

Watching various speeches at CPAC, I’ve found it interesting that the rhetoric from Republican elected officials and conservative leaders hasn’t changed much from last year’s election to today. And in fact, in some cases it may have even hardened. Even former presidential candidate Mitt Romney gave a speech Friday at CPAC that sounded like it was something from the campaign trail rather than a forward looking message. (There have been a few exceptions, of course, like Louisiana Governor Bobby Jindal’s call for a new focus for his party, similar to other speeches he’s made recently and former Speaker of the House Newt Gingrich’s chastising of the party’s establishment.)

Yet the high point for Republicans—in this moment at least— seems to be Senator Rand Paul. His filibuster demanding answers from the Obama Administration on the use of drones on United States soil illustrated the ability of one senator to lead on an issue and capture  the national dialogue, even as a member of the minority party in the United State Senate.

Staffers on Capitol Hill noted that Paul’s filibuster helped change the level of morale among Republicans in Washington, and it did so at a key moment; just before the leading national gathering of conservatives. At CPAC Sen. Paul was remarkably well received but particularly so by large numbers of young conservatives—many young conservatives who likely attended the event, at least in part, because of Paul.

Rand Paul’s recent ascent in popularity further stokes rumors of a presidential run for the Kentucky senator in 2016. Regardless of the potentiality of a bid for the White House, the GOP has a libertarian-minded Republican helping shape public discourse on issues with crossover appeal particularly hitting a cord with young people and those interested in civil liberties. That’s progress.

Even though a wholesale change in messaging by Republicans has not been evident at CPAC, there are new, powerful voices beginning to shape a movement in need some modernization. And thus an understandable bump in enthusiasm by the GOP.

By John Seiler

California is going backward again. Our state income tax rate just jumped to 13.3 percent, by far the highest in the nation.

By contrast, Nebraska is the latest state to consider getting rid of its state income tax entirely:

“Gov. Dave Heineman proposed an ambitious plan Tuesday to scrap Nebraska’s income and corporate taxes while eliminating as much as $2.4 billion in sales-tax breaks for businesses, with all industries except for food on the bargaining table….

“‘Are we going to be satisfied with a mediocre tax system that won’t create the jobs of the future for our sons and daughters?’ Heineman asked. ‘Or, are we willing to consider reforming the tax code so that we have a modern, simpler and fairer tax code? Are we willing to consider a bold, innovative and strategic tax reform plan that would create a top ten business climate in Nebraska?'”

It’s too bad the plan would increase sales taxes. They should just end the income tax and replace it with nothing, making up the difference by cutting waste and bloat in government.

Earlier, Louisiana Gov. Bobby Jindal (pictured nearby) called for abolishing his state’s income and corporate taxes.

And Oklahoma at least tried to get rid of its income tax under Gov. Mary Fallin, although it failed.

The trend is that some states realize they can best create businesses and jobs by imitating Texas, which already has no state income tax and whose economy is booming.

It’s also worth noting that all these tax-cut governors are Republicans. In California, our Republicans have been the clownish Gov. Arnold Schwarzenegger, who increased taxes a record $13 billion; and Meg Whitman, who had no credible tax-cut plan, just vague pro-business meanderings.

As to California overall, we used to lead America on pro-business, pro-jobs policies, such as Proposition 13; now we’re going in reverse.

By Lance T. Izumi

Around the country, governors like Bobby Jindal in Louisiana have led successful fights for new education-reform laws that eliminate or restrict teacher tenure, re-think old-line seniority protection rules and give parents the ability to choose the public or private school that best meets the needs of their children.  In contrast, California Gov. Jerry Brown eschews a grand redesign of California’s dysfunctional public education system and seems satisfied merely to play small ball and tinker around the edges.

To be fair, some of the governor’s moves, though far from earth shattering, are commendable.  For instance, in his recent May Revision to his 2012-13 budget proposal, Brown seeks to eliminate a number of state education mandates that have created funding inflexibilities for local schools.

His main “reform” proposal, however, which seeks to re-structure education funding through a so-called weighted-student-formula mechanism, is a pale effort that will do little to remedy the poor incentives built into the current public education system.

The first problem with Brown’s version of WSF is that it fails to incorporate some of WSF’s key commonly accepted features.  Under WSF theory, a base-funding amount from the government is attached to each student, with additional amounts added for factors like low-income family background or English-language-learner status.  This sum of funding follows the student to the school that he or she decides to attend.  This portability of funding allows individual local schools to receive funding directly, bypassing inefficient district bureaucracies and creating competition between schools for students and the funds attached to them.

UCLA business professor William Ouchi, a leading WSF researcher and exponent, says that because funding goes to individual schools, principals “have the autonomy to decide how to allocate money for resources that include teaching staff, other employees, and extra services.”  The principal is empowered to become an entrepreneur.  Further, Ouchi says that a WSF system empowers parents “to choose the school they feel is best for their children.”  Giving parents choice “creates a market-driven system within the public schools that will support approaches that serve students best.”  Jerry Brown’s WSF plan does none of these things.

No competition

True, Brown’s WSF plan would attach base funding plus supplemental funding amounts to students, but the funds would be collected by school districts, not by individual schools, which undermines WSF’s big selling points of bypassing bloated politics-driven bureaucracies, empowering school principals, giving greater choice to parents and increasing competition between schools.  In essence, Brown’s plan is just a variation on the way the state funnels money to school districts.  The districts will have more flexibility on how they spend their dollars, but the anti-change incentives inherent within the system will remain basically the same.

Further, Brown conditions the implementation of his WSF system on the passage of his tax hike proposal on the November ballot.  Given the lukewarm support for the proposal in the polls, the defeat of the recent tobacco tax initiative, and the state’s continuing bad economy, it is far from certain that the governor’s tax increases will win.  If his tax plan loses, Brown would delay implementation of WSF.

Even if voters approve his higher taxes, he would phase in WSF implementation over a lengthy seven-year period.  In other words, don’t expect a quick shake-up or quick results.  As even a recent sympathetic report by Policy Analysis for California Education acknowledged, “It is a long way from this policy proposal to a fully-functioning weighted pupil funding system” that meets the objectives of a fairer, more rational and more transparent K-12 school finance system in California.

Same Education Code

In addition, Brown’s WSF proposal includes no meaningful revamping of California’s 12-volume education code.  As Reason Foundation education director Lisa Snell has noted, even under WSF, “unlike an actual market system in education, public schools are still strapped with myriad local, state, and federal regulations.”  The Legislative Analyst’s Office underscored the absence of regulatory reform in the governor’s proposal when it proposed an alternative plan that called for, among other things, removing state restrictions on contracting out education-related services.

Also, as I pointed out in my 2007 “California Education Report Card,” published by the Pacific Research Institute, CalWatchDog.com’s parent think tank, “WSF must operate within the confines of local teacher union contracts, which may make it much less easy to make important staffing decisions.”  Not surprisingly, Jerry Brown, who signed the 1975 Rodda Act, which established teacher-union collective bargaining, makes no effort to scale back the wide scope of current union contracts.

Ultimately, the best way to make funding truly portable with students is to give parents vouchers or other school-choice tools.  Parents could then send their children to the public or private school of their choosing, which would foster competition between schools, and result in better school and student performance and higher parental satisfaction.

These choice programs are also significantly less costly than the regular public school system.  Louisiana, for example, expects to save money as it dramatically expands its voucher program to cover up to 380,000 students.  John White, Louisiana’s superintendent of education, notes that while the state spends about $8,500 per pupil to educate regular public-school students in New Orleans, it spends only about $4,500 for every student in the city’s pilot voucher program.

Lisa Snell rightly observes: “Is it really necessary to stay within the bounds of the existing public school system and complete the difficult task of changing the system from within?  A better alternative would be to move to a direct-financing mechanism through vouchers, tax credits, or charter schools — an arrangement under which per pupil funding immediately empowers parents and leads to the most decentralized schools of all, with 100 percent local budget control.”  Other governors have come to this realization and have enacted wide-ranging voucher and other school-choice programs.  It’s past time for Jerry Brown to have his Damascus moment, too.

Lance T. Izumi is Koret senior fellow and senior director of education studies at the Pacific Research Institute.  He is the author of Obama’s Education Takeover (Encounter Broadsides, 2012). YouTube about the book: